Cebu Air Inc., the operator of budget carrier Cebu Pacific, on Wednesday reported a net loss of nearly P1.2 billion in the first quarter after authorities shut down the aviation sector in the middle of March because of the COVID-19 pandemic.
The airline unit of the Gokongwei Group reported a net loss of P1.18 billion from January to March, a reversal from the P3.35-billion net income posted in the same period last year.
Revenue tumbled 25 percent in the first quarter to P15.91 billon from P21.77 billion a year ago following the cancellation of regional flights.
“The overall decline in revenues was brought about by the impact of the COVID-19 outbreak which started with cancellation of flights to China, Hong Kong, Macau and South Korea in varying periods during the quarter due to the imposition of travel restrictions,” Cebu Pacific.
“With the rapid escalation of the situation surrounding COVID-19, the Philippine government implemented an enhanced community quarantine over the entire Luzon, which then prompted the Group to suspend all its scheduled flights beginning March 19, 2020,” it said.
Passenger revenues decreased 27.4 percent to P11.38 billion from P15.679 billion in the three months ending March 2019.
The group saw a 16.5-percent drop in passenger traffic from 5.3 million to 4.4 million, as flights decreased 14.7 percent and load factor declined 2.9 percentage points from 84.2 percent to 81.3 percent.
Average fares also declined 13 percent to P2,580 in the first three months this year from P2,965 in the same period last year, contributing to the reduced revenues.
Cargo revenues dropped 29.7 percent to P1.013 billion from P1.442 billion last year following the decrease in cargo volume transported in 2020 by 20 percent as a result of reduced flight operations and the effect of lower cargo yield by about 12.2 percent.
Operating expenses fell 4.2 percent to P16.60 billion from P17.33 billion a year earlier. “Such decline is primarily driven by the suspension of the group’s operations due to the COVID-19 global pandemic since a material portion of its expenses are based on flights and flight hours,” Cebu Pacific said.
Flying operations expenses went down 13.8 percent to P6.180 billion from P7.17 billion incurred in the same period last year. This was due to the 2.14-percent decline in fuel expenses.
Average jet fuel prices went down by 22.6 percent to $59.24 per barrel this year from $76.50 per barrel in 2019.